Brazil to allow concessionaires return unprofitable contracts

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Wednesday, July 18, 2018

Brazil's President Michel Temer (pictured) plans to sign a decree authorizing struggling private groups to return their infrastructure concessions.

The decree will be signed as the chief of staff department ended a deep analysis about all legal risks involved, a presidential palace spokesperson told BNamericas.

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The decree will cover concessions for highways, railroads and airports. Several concessions that were tendered during the administration of former president Dilma Rousseff failed to meet original revenue estimates due to the country's deep 2015-16 recession.

The decree will likely allow Invepar to return its BR-040 highway concession, which links Brasilia and Juiz de Fora cities, and Acciona's BR-393 highway. Both companies already signaled interest to return their contracts.

Companies interested in returning their concessions must file a request with respective regulators, explaining technical and economic reasons for a return. The decision then lies with the regulator.

Details of the new rule will be announced when the decree is published, in the coming days, although the spokesperson did not unveil an exact timetable.